Biotech firm's stock to be delisted from Nasdaq

TedGriffith

Ahead of the news, Deltagen
DGEN, +0.00%
shares added 1 cent to 31 cents on Friday. Back in 2000, during investor euphoria over genomics, the stock touched as high as $32.

Redwood City, Calif.-based Deltagen also announced its stock will be delisted from the Nasdaq National Market on July 3. The company said it "believes that it should be eligible for trading on the OTC Bulletin Board."

Deltagen said a key financing, which included a loan and a preferred stock offering, didn't close. The company said it couldn't arrange an alternative source of financing and so decided to file for bankruptcy "while it had sufficient funds to explore dispositions of its assets and other reorganization transactions."

Deltagen, which specializes in providing services and products to aid in the discovery of new medications, said it has cut its work force down to 28, or less than a tenth of the 290 employees it had last year, according to Hoover's.

Customers and partners of the biotech research outfit have included Pfizer
PFE, -1.65%
the world's largest pharmaceutical company, and its next biggest rival, U.K.-based GlaxoSmithKline
GSK, +0.05%
according to Deltagen's Web site.

Deltagen said Larry Hill, a principal with a firm that specializes in corporate restructuring, will be its new CEO.

Deltagen's bankruptcy filing comes at a time when the overall biotech sector is enjoying a resurgence. The Amex Biotechnology Index
BTK, -1.42%
is up nearly 30 percent in the year to date amid new biotech product approvals and positive news about experimental cancer treatments. However, biotech remains a high-risk field as ideas that are scientifically promising often prove not to be commercially viable.

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